Multiple choice problems on property rights and wage rate

1. A supply schedule shows

1. The "market potential" for the product

2. How much capable to producers are willing and able to buy at different prices

3. Possible combinations of output under different conditions

4. How much consumers would like to sell at different prices

5. All of the above

2. The price for labour is the wage rate. Illustrate what happens to the quantity of labour supplied if wages increase?

1. It increases

2. It decreases

3. It does not change

4. Uncertain - economic theory has no answer to this problem

3. An economic rationale for property right is

1. To discourage the depletion of resources

2. To encourage resource consumption

3. To discourage high prices for resources

4. To encourage the "free-rider" concept

5. To encourage production and consumption

4. Illustrate what of the subsequent is NOT true about property rights?

1. They encourage economic efficiency

2. They create incentives to preserve resources

3. They lead to lower resource costs

4. They are protected by the state

5. All of the above are true

5. Illustrate what of the subsequent would NOT be considered a primary role for the state?

1. To protect property rights

2. To enforce the rules made by the members of the society

3. To collect taxes

4. To form and maintain an army

5. To set and regulate free markets

6. Illustrate what is the opportunity cost of economic growth?

1. Investment in the current time period

2. Improved technology in the current time period

3. Capital goods in the current time period

4. Consumption in the current time period

7. Illustrate what is the economic reasoning behind the proposal to legalize drugs?

1. Legal drugs will greatly increase the supply, which will reduce the price Americans pay to foreign capable to producers of the drugs

2. All forms of government restrictions on behaviour are immoral, and ought to be removed

3. Legal drugs will be much cheaper than illegal drugs, which will reduce incentives for crime to obtain money for drugs and to protect drug "business".

4. Legal drugs will be more expensive than illegal drugs, and the market system will encourage more production, thus lowering the price

5. Dealing with supply is always easier than dealing with demand, and legalization accomplishes which

8. Demand is said to be price elastic at a point on a demand curve if

1. A 1% rise in price reduces the quantity demanded by more than 1%

2. A 1% rise in price reduces the quantity demanded by less than 1%

3. A 1% rise in price reduces the quantity demanded by more than 10%

4. A 1% rise in price reduces the quantity demanded by less than 10%

9. When the marginal revenue product (MRP) of an input is less than input's price,

1. The capable to producer should expand use of which input

2. The price of the input will automatically rise in a free market

3. The capable to producer should reduce use of which input

4. The marginal physical product of which input must be below its average physical product.